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How Sarepta Can Secure Speedy FDA Drug Approval Despite a Negative Panel Vote

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There's a risk to the consensus investor view that the U.S. Food and Drug Administration will reject Sarepta Therapeutics' (SRPT - Get Report) Duchenne muscular dystrophy drug eteplirsen following Monday's negative advisory panel.

Senior FDA officials, most notably Dr. Janet Woodcock, the agency's top drug evaluator, spent a lot of time at Monday's panel making supportive statements about eteplirsen. FDA officials, at some moments, even seemed to be steering the experts invited to sit on the panel to vote in favor of eteplirsen.

Ultimately, advisory panel members decided Sarepta's eteplirsen clinical data wasn't strong enough to justify approval. The negative outcome was a devastating disappointment to the boys stricken with DMD and their families attending the panel. Some of them had spoken during the 11-hour meeting, urging the panel members to support the approval of eteplirsen, which they view as a life-saving drug.

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What happened next was surprising.

Minutes after the advisory panel adjourned on Monday night, Woodcock met with some of the DMD boys and their families. Terri Ellsworth posted a picture of a smiling Woodcock standing next to her son, Billy, on her Facebook page.

Jenn McNary, mother of two boys with DMD, confirmed that Woodcock also spent time talking with several other families in the hallways of the Maryland hotel where just minutes earlier the advisory panel had voted to reject eteplirsen.

The final decision to approve or reject eteplirsen lies with Woodcock, whose official FDA title is Director of the Center for Drug Evaluation and Research. She has the power to overrule the concerns about eteplirsen raised by the team of FDA clinical reviewers. She can also consider but throw out the recommendations against approval issued by the members of the advisory panel.

If Woodcock agreed with all the bad things said about eteplirsen on Monday night, if she had no plans to overrule or cast aside the recommendations against approval, why did she go out of her way to meet with DMD boys and their families immediately after the meeting ended?

Could the answer be that Woodcock plans to approve eteplirsen?

The FDA has until May 26 to make an approval decision on eteplirsen, so we won't know what's truly in Woodcock's head until then. But taking a closer look at statements made by Woodcock and other top FDA officials on Monday offer some intriguing clues to their intentions.


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Investors also seem to be hedging their bets. Sarepta shares were down only 24% since Monday, a surprisingly muted reaction to the advisory's panel negative votes. The stock could easily be down 50% or more if eteplirsen's approval chances in May were near zero.

Let's start with Woodcock's opening statement on Monday morning, most of which dealt with explaining the threshold for accelerated approval. For eteplirsen, accelerated approval hinges on the the drug's ability to produce the muscle-lubricating protein dystrophin.

I watched a replay of the advisory panel and transcribed her comments. This how Woodcock ended her remarks.

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Finally, I would note that much of the effort in evaluating a drug development program goes into avoiding a specific mistake. That is erroneously approving a drug that is not effective. There is often little consideration of another error, which is failing to approve a drug that actually works. In devastating diseases, a consequence of this mistake can be extreme. But most of these consequences are borne by patients who traditionally have little say in how the standards are implemented. The accelerated approval program includes a requirement for confirmatory studies for efficacy. So, as you heard from the sponsor, they have to do further studies to explore and confirm effectiveness. An inherent presumption in this program of accelerated approval, which is written in the preamble of our regulation about it, is that more uncertainty is going to be tolerated initially and that in fact sometimes we will collectively get it wrong. Otherwise accelerated approval will have no different standards than regulator approval.

Applied to eteplirsen, a drug with a very clean safety profile, a logical interpretation of Woodcock's statement is support for accelerated approval.

She seems particularly worried about rejecting eteplirsen today only to discover later that the drug works. The repercussions of such a situation could be disastrous to the FDA, much worse than when the agency rejected the lung disease drug pirfenidone in 2010 only to backtrack and approve it four years later.

Woodcock next spoke during the...


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